Gross Profit Calculator
Calculate your gross profit and gross profit margin in seconds. Enter your total revenue and cost of goods sold to see how much money is left after direct production costs, before operating expenses like rent, marketing, and salaries.
Gross profit = revenue - cost of goods sold. If your business brings in $500,000 in revenue and spends $300,000 on COGS, your gross profit is $200,000 and your gross profit margin is 40%. That means you keep 40 cents from every dollar of sales before overhead costs.
Gross profit margin varies dramatically by industry. Software companies often enjoy margins of 70-85% because digital products have near-zero marginal cost. Grocery stores operate on thin margins of 25-30%, while restaurants typically sit around 60-65%. Manufacturing margins usually fall between 30-50% depending on the product complexity.
Gross profit is not the same as net profit. Gross profit only subtracts direct production costs (materials, direct labor, manufacturing overhead). You still need to subtract operating expenses (rent, salaries, marketing, insurance), interest, and taxes to get net profit. A healthy gross margin gives the business room to cover those expenses and still turn a profit on the bottom line.